TATA HITS THE TRACK TO A NEW FUTURE - FOCUS ON TRANSPORT ...
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ISSUE 11 2018 | R106.00
? ??????????????
o n tr an spo rt an d lo gistics
fo c u s o n t ra n s p o rt.co. z a
Tata hits the track
to a new future
IAA b u mpe r re p ort: Auto moti v e Co d e
A transport industry in flux! o f Co nduc t: a death sentence?
Ch eap ty re s Wi l l bus co mmut e rs
don’t make cents be left stranded?
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b FOCUS ON TRANSPORT
ISSUE 11 2 0 1 8
contents
PAGE PAGE PAGE PAGE
10 15 20 26
WANDERINGS IN Co up l i n g o l d When bigger IAA 2018: DRIVING
THE DESERT t r a i l e r s to ne w really is better TOMORROW!
South Africa’s current truc k tr ac to r s FOCUS checks in on Much is always expected
regulatory woes are, in fact, There are many items to the local extra-heavy of the IAA and, once again,
nothing new. check on older trailers to commercial vehicle this year’s event did not fail
ensure that they are in a segment. to deliver.
roadworthy condition.
PAGE PAGE PAGE PAGE
40 42 48 60
A DEATH CHEAP j ust USED AND OUT OF TARIFFS MUST RISE
SENTENCE FOR d o e s n ’t ADD UP WARRANTY – AN The increasing cost of fuel,
THE AUTOMOTIVE Is expensive better, or ACCEPTABLE RISK ? labour and input costs in the
INDUSTRY cheap cheerful? When it FOCUS investigates if commuter-bus sector is not
The voluntary Automotive comes to tyres, you have it’s worth buying out of being satisfied by
Code of Conduct allows to be wary of your upfront warranty, and what to government subsidies. or
unregulated parts to be fitted costs to save down the expect and inspect. inflation on ticket sales.
on vehicles. road...
Published monthly by Charmont Media Global EDITORIAL DIRECTOR PUBLISHER
Unit 17, Northcliff Office Park, 203 Beyers Naude Charleen Clarke Tina Monteiro
COVER STORY Drive, Northcliff, 2195. Cell: 083 601 0568 Cell: 082 568 3181
This year, the Tata P O Box 957, Fontainebleau, 2032, South Africa charleen@focusontransport.co.za tina@focusontransport.co.za
Tel: 011 782 1070 | Fax: 011 782 1073 /0360 womanonwheelsza
Group will be 150
years old, while
the company has Editor CONTRIBUTORS PRINTING
been present in Gavin Myers Mike Fitzmaurice Camera Press
Cell: 072 877 1605 Sam Rolland
South Africa for 21 gavin@charmont.co.za Andrew Robinson © Copyright. No articles or
years. We celebrate these gav_myers Vaughan Mostert photographs may be reproduced,
milestones on page 6. in whole or in part, without specific
SUB-EDITOR ADVERTISING SALES written permission from the editor.
Jeanette Lamont Atish Ramachul
REGULARS jeanette@charmont.co.za Cell: 061 320 2210
atish@focusontransport.co.za
2 Wheel Nut JOURNALISTS
4 Getting Social Mariska Morris Diana Gouws
10 Driving Africa Cell: 084 788 8399 Cell: 082 801 8506
11 Hopping Off mariska@charmont.co.za diana@charmont.co.za
Patroffie
13 Economically Mobile CIRCULATION MANAGER charmont 2018
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media global
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56 Short Hauls
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FOCUS ON TRANSPORT 1
w h eel n u t
No getting rid of
the BS at borders…
When will the delays,
corruption and looting at “If drivers don’t cough up, they attack and rob them
African borders be dealt of everything they can lay their hands on, stone their
with? vehicles and, in some cases, even threaten to burn
drivers alive inside their trucks,” he says.
This is undeniably shocking and unacceptable.
Fitzmaurice forwarded me a WhatsApp message from
g av i n m y e r s
one of the drivers caught in the chaos: “I was driving that
Truck last trip they Attacked me day light around 12:30hr
they break tha Window but I did stop because when
ot in our lifetime, probably... Not a month ever u stop they will attack u for them to take everything
N
goes by without some report of delays, from your truck [sic].”
inefficiency or corruption at one or Fitzmaurice is worried that there is no plan by
more borders in the Southern African authorities to try and fix the situation, which gets worse
Development Community (SADC) region. each day.
The latest culprit is Kasumbalesa, the “The situation is now untenable and nobody seems
border between Zambia and the Democratic Republic of to be able to do anything about it. Governments and
Congo (DRC). authorities are just turning a blind eye, probably because
I was alerted to the situation on October 17 by they have some hidden interest in the situation. As we
Mike Fitzmaurice, CEO of the Federation of East and all know, corruption is rife when there is chaos and this
Southern African Road Transport Associations (Fesarta), is organised chaos without a doubt. The situation is just
who explained: “Trucks cannot move because of the totally unacceptable and there is little or no policing
congestion and the DRC just cannot cope with the taking place,” he notes.
volumes of traffic. What hope is there for initiatives like the African
“This is largely due to the fact that most of the revenue Continental Free Trade Agreement, if this is how cross-
authorities and other government agencies at the border border trade is conducted, and drivers are treated? Not
only arrive at work between 08:00 and 09:00 and stop to mention the continual issues in the SADC region that
working by 17:00 to get home; as most of the staff live Fitzmaurice writes about in his column, Driving Africa,
in Lubumbashi, some 100 km away. As a result, nothing each month.
happens before 09:00 and very little can be done in the No region in the world is perfect, but it seems African
seven-hour working day.” leaders do not realise just how great our continent
Fitzmaurice notes that the situation started towards the could be if they would just put their own interests aside
end of 2017 and has got progressively worse since then. and work at fixing the basics. What, in fact, is worse is
It has become so bad, in fact, that trucks going to the that it seems they don’t care. F
DRC are now queuing all the
way back to Chililibombwe,
Zambia, some 20 km away.
It is taking four to five days
to clear the border and
trucks are queuing for up to
three days before they even
get to the border.
“The border post is now
fully congested on both
sides and trucks cannot
move as there is just no more
space to park trucks. There
is total chaos at the border:
corruption is rife and there
is a lot of criminal activity
taking place with local
touts demanding protection Above: One of the trucks attacked at the border (left). A sea of trucks on the DRC side waiting to be
money from drivers. processed for transfer to Whiski Dry Port for final clearance (right).
2 FOCUS ON TRANSPORT
? ?????????????? HOW GOOD IT IS WON’T SURPRISE YOU. HOW MUCH IT SAVES YOU WILL. Fuel accounts for nearly half the Total Cost of Ownership of a truck. Which is why we concentrate on making ours as economical as possible. With Scania, you’re paying for incredible reliability and the highest levels of uptime. So can you have a truck that’s every bit as good as you expect, but ends up costing less than you thought? YES YOU CAN. FOCUS ON TRANSPORT 3
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4 FOCUS ON TRANSPORT
? ??????????????
Cover story
Celebrating 150
years (and some
mighty fast trucks)
Tata Group did n’ t s ta rt out as a veh i c l e - ma n u fac t u r i n g co mpa n y. H ow e v e r , t h i s i s
perhaps what it ’ s b es t k now n for in S o u t h A f r i ca . I t h as a l so do n e so me fa n tast i c
thi ngs for t ruck ing in it s nat i v e co u n t ry, I n di a , l e a r n s GAVIN MYERS
ron and steel, hotels, hydroelectric The Indian trucking industry, too, has benefited from
I
power, locomotives, trucks, cars, aviation, the Group’s community involvement. When it was realised
information technology, insurance, that “old school” trucking was no longer meeting customer
chemicals, beverages, and telecoms are expectations, and that younger generations didn’t see
just some of the industries the Tata Group entering the industry as a respectable career choice, the
has entered into since its inception by Jamsetji Nusserwanji Prima T1 Racing Series was established to celebrate the
Tata in 1868. drivers and promote trucking in India.
A 29-year-old entrepreneur and philanthropist, whose The Prima has proved to be the natural fit for use in the
business savvy was formed working in his father’s banking racing series. When it was launched, it marked the arrival
firm, JN Tata laid the foundations for a global conglomerate of a completely modern truck that met the best global
that today holds more than 100 companies and employs standards.
more than 660 000 people. Based on Tata’s “world truck”, the Prima racing trucks
Since the early days, employee wellbeing and community has enabled Tata Motors to connect to its national and
development have always been part of the way Tata Group international customers. The trucks are adorned in all
operates. For example, Tata employees were among the manner of global sponsorship livery. Those lucky enough
first – in the world – to benefit from the likes of provident might have even seen the One World Racing vehicle
schemes and maternity leave. lapping the Kyalami Grand Prix Circuit at the South African
Having created numerous trusts and established the Festival of Motoring during September.
Indian Institute of Science during 1911, 66 percent of the It will be in South Africa for a while longer, before heading
company’s shares are today held by Tata Sons, a charitable back to India – once again, doing its part to raise the profile
trust and the holding company of the group. of the trucking industry on Tata Group’s home soil. F
6 FOCUS ON TRANSPORT
? ?????????????? FOCUS ON TRANSPORT 7
cover story
A
different
Tata
Tata M oto r s c e l e br at e d i t s
2 1 st a n n i v e r sa ry i n S o u t h
A f r i ca t h i s y e a r a n d, i n t h at
t i me , t h e br a n d h as g row n
a n d e vo lv e d to o f f e r a
v e h i c l e so lu t i o n fo r
e v e ry c u sto me r ’ s n e e ds.
GAVIN MYERS f i n ds o u t w h at ’ s
n e x t fo r t h e br a n d
hen Tata Motors started operations in South This approach has been no more apparent than with the
W
Africa with Tata Automobile Corporation most recent addition to Tata showrooms; the Ultra, which
South Africa during 1997, it offered customers was revealed at the 2017 Futuroad expo. In fact, the Ultra
just a couple of models. However, the brand story goes back to 2011. Since then, many prototypes
carefully established its operations and have been put through development to get the
steadily increased its rate of business. product just right for South African consumers.
“It was a modest start, but from 2004 the company “After being unveiled at Futuroad, the Ultra
began to expand its range of products. There was massive was put into a seeding phase of controlled
expansion up to 2008,” comments Sreenath Punathil, general sales. This was done because we needed
manager, sales and marketing, Tata Automobile Corporation to gather customer feedback, which
South Africa, adding that the 2008 global recession didn’t we download on a daily basis though
hold the company back. our central office to see how they are
During this time, it reengineered its products and made performing,” explains Vivek Acharya, senior
some key introductions to keep volumes up, launching manager, sales and marketing, trucks and
the EX2 range between 2009 and 2011. The company has buses.
expanded so much since those early years that it now So far the feedback has indicated that the
ranks among the leading original equipment manufacturers South Africanised Ultra (it may look similar to
(OEMs) operating in the South African market. the models in other markets, but underneath
During the recession, the company designed new- it’s very different) is delivering on its four pillars
generation platforms and began to prepare to introduce of style, comfort, safety and performance – all
the Prima and Ultra. It also used the opportunity to begin while delivering the ultimate goal of low cost
manufacturing locally; opening the semi-knocked down of ownership.
plant in Roslyn, Pretoria, which was also symbolic of its An altogether new range with vehicles
commitment to the local market. available in the 4,5-t category, the Ultra offers
Today, the Roslyn plant caters to more than 80 percent three- and five-litre common-rail diesel engines
of the total volume of trucks and buses sold by Tata in that generate 104 and 134 kW, respectively,
the Southern African Customs Union. It now produces ten driving through a six-speed gearbox. Among
different vehicle ranges; from four- to 75-t gross combination its key features, the Ultra boast full air brakes;
mass. a 2,2-m wide, walk-through cabin; mechanical
“Tata strongly believes that different customers have suspended seats; dash-mounted gear shift; tilt
different needs – some want the lowest costs, others want and telescopically adjustable steering (power
finesse and style. We need to understand these needs and assisted); standard air-conditioning and radio;
cater to all of them. However, every vehicle we sell is built on a hydraulically tiltable cab; and a panoramic-view
the foundation of low cost of ownership,” Punathil says. windscreen that makes driving easier.
8 FOCUS ON TRANSPORTcov e r s tory
Tata is adamant that it will not launch any product without customers. For this we are ensuring we have a well-entrenched
thorough local testing – and the Ultra range has already been and prompt after-sales support for each customer through
expanded with the 1014 model that is designed specifically intensive parts and service reach,” says Luther.
for customers who need to move high-volume cargo. “Tata’s vision is of customer centricity. We have been
While the 500-mm extra length and 200-mm extra width present in this country for more than 20 years and we
(it has the widest track in the segment) of the standard Ultra understand the South African market as well as those of
returns 13-percent more capacity volume while still offering neighbouring countries. We have close to 91 touch points
nimble manoeuvrability (validated by those customers who across South Africa, Namibia, Botswana and Swaziland.
tested the vehicles over the past year), the 1014 model offers In addition to this, through our sister companies, we have
an extended wheelbase and longer load body, which allows outlets in Mozambique, Zambia, Malawi, Zimbabwe,
for even more volume. The standard extra-length, micro- Tanzania, Kenya, Uganda, Nigeria, Ivory Coast, Ghana and
alloyed chassis also means that no aftermarket chassis Senegal – and thus long-haul trucks can be serviced at any
extension by the customer is required. of these outlets.”
The 1014 boasts a six-tonne payload, making it ideal for Luther adds that the parts stockholding is extensive and
customers for whom an eight-tonne truck might be “overkill”. the company has a first-pick rate of 92 percent.
While we can expect to see the Ultra range grow further Enhancing uptime are the standard two-year/120 000-km
in time (as well as a few other key vehicles in the Tata service plan and enhanced service intervals of 20 000 km
range, but more on those another time), Harneet Luther, (minor) and 40 000 km (major) on the Ultra, as well as the
executive director, Tata Automobile Corporation, reiterates extended five-year/500 000-km warranty on the LPT 813
that the strategy of Tata Motors remains clear: to address all and 1518 four- and eight-tonne models.
customer needs and all segments of the market – all while Indeed, it would seem that Tata Motors is as ready as
enhancing uptime. it’s ever been for any challenge the market can throw at it.
“‘It’s all about uptime’ is the basic theme the organisation There’s little doubt that customers can expect to experience
is working towards by creating infrastructure to support a different Tata going forward. F
R e ad o ur i n -d e p t h re p o rt
o n t h e U lt ra
FOCUS ON TRANSPORT 9D rivin g A f r i ca
M i k e Fitzma ur ic e is the CEO of the Federation of East and Southern Africa Road Transport Associations (Fesarta). He has 42
years of experience in the transport and logistics industry with several major companies in South Africa, as well as overseas exposure
with some of the leading transport companies in six European countries. Since 2004 he has established and run Transport Logistics
Consultants. In May 2015 he became CEO of Fesarta.
Wanderings in the Desert
South Afri ca’s cur r ent The Organisation for Economic transport operations in many areas.
regulatory woes a r e, in
Cooperation and Development The failure to design workable
fact, nothi ng n ew
defines eight principles of “good road-transport regulation has been
he road–transport regulation” and, when viewed against primarily due to the bureaucratic
regulatory system
T
these, the current South African processes by which legislation has
evolved from the road-freight and passenger-transport been developed, and the lack of
National Transport policies and regulations in many coordinated input from the transport
Policy Study (NTPS) instances show clear evidence of industry.
in 1987, which recommended practical misunderstanding of the The problem and its solutions are
deregulated road freight, but left ports “unintended consequences” of the identified and addressed in the Road
and railways (and the airline) as state legislation. Freight Strategy, which says: “It is
owned enterprises (SOEs). The transition from provincial to recommended that the government
The SOEs are “self-regulated”, national road-freight regulation should take the initiative to establish
within the Department of Public in the 1980s included many formal effective, active and continual
Enterprises, which has also lacked inefficiencies, such as ineffective liaison with the industrial users and
technical appreciation of the role coordination between different levels service providers in the road-freight
of transport and the principles of government and, at the national sector.
of effective management in the
commercial world.
Apart from the obvious restrictions
to business caused by parastatal
inefficiencies and mismanagement,
nowhere in the current dispensation
is there a more obvious lack of
competence than in the arena of road-
transport regulation and enforcement,
with the plethora of unworkable and
impractical regulations as evidence
of total misunderstanding of the role
of a regulator.
There are ten regulations currently
in limbo, or stalled for practicality of
implementation, as well as the many
recommendations from the National
Transport Master Plan (NTPS), the
National Freight Logistics Strategy level, a lack of understanding of the “In the current situation, the
and the Road Freight Strategy principles, or competence, in the governmental decision processes
(approved by Cabinet in 2017). development of transport regulation. are based on the premise that the
Meanwhile, the costs of our The result has been failure to official pronouncements will result
shocking national road-safety achieve the Road Transport Quality in change, whereas the reality is
situation and the externalities and System (RTQS), which was originally that the commercial world makes its
inefficiencies caused by bureaucracy proposed by NTPS, and severe own decisions, based on the policy
are a huge drain on the economy. problems with the quality of road- pronouncements from the government.
10 FOCUS ON TRANSPORTDr iv ing A frica
“In the current South African manage parastatals, and the continual No further action has been initiated
situation, it is critical that the private- realities of bribery and corruption. to implement the NFLS, but it is still
sector decision-makers are given “The current process – of limiting being discussed and promoted, so
reason to support official policies, and consultation and coordination to there is still hope for change.
for that reason they must be party to departments, provinces, parastatals, It is to be hoped that the next
the decision-making process. agencies and quasi-official structures restructuring of transport in South
“An effective communication – insulates the entire process from the Africa will result in a framework that
structure will prevent some of the commercial and industrial sectors, provides for logical integration of
impractical proposals for interventions which are the recipients and payers modes under one authority, scope
and ensure that planning is based for all the results of the governmental for private-sector investment in
on the realities of the commercial decision-making. all modes, revision of regulatory
undertakings. “It further fosters litigation. and enforcement systems, and
“The range of negative perceptions Recommendations for a consultative reorganisation of the Department
is fuelled by stalled, recently proposed structure were made in the National of Transport into a lean, focused,
legislation, issues such as cross-border Freight Logistics Strategy (NFLS) and professionally competent
permit charges, perceived failures to 2016.” entity. F
h op p ing off
Va ug ha n Mo s ter t lectured on public transport issues at the University of Johannesburg for nearly thirty years. Through Hopping
Off, Mostert leaves readers with some food for thought as he continues his push for change in the local public transport industry.
Here’s your
chance, Gautrain!
Here’s an i d ea for a when the railway carried 707-million workers, who now have to pay higher
prospecti ve d oc tor a l passengers. Since then 500 000 taxi fares, or buy cars; and
thesi s
people, who could be travelling by rail (c) The energy plan, which fails to
he latest twist in the (supposedly a national objective), are quantify the extra energy that will be
saga at the Passenger now travelling in oil-burning minibus required when rail transport collapses.
T Rail Agency of South
Africa (Prasa) is that
taxis and cars.
The implosion at Prasa makes a
Is anyone measuring the hammer
blow to our balance of payments,
during the most mockery of the planning profession since a lot of money goes out of
recent 12-month financial period, in South Africa. Documents which the country to pay for imported fuel,
annual passenger levels have fallen should be thrown in the dustbin rubber and spares? Are we really
from 448 to 370 million (my guess is include: serious about becoming a fossil-fuel-
that it will now be even lower at 340 (a) The integrated public transport free South Africa? I don’t think so.
million), while the subsidy is now over plans, which for decades have Fortunately, at least two people are
R5 billion. routinely assumed that the number on the case. The first is DA spokesman
This means that every day since of people using rail transport will Manny de Freitas, who “will be asking
2016, 320 more people have switched continue to grow at one percent a the minister questions about what he
from electrically powered (rail) to year; plans to do”.
fossil-fuel-powered transport. (b) The financial plans that fail Second, is the interim chairperson
It gets worse if we go back to 1982, to measure the consequences for of Prasa, Khanyisile Kweyama, >
FOCUS ON TRANSPORT 11Enlightened ho p p i n g of f
Transport Manufacturers
- choose strong, light-weight, durable
and corrosion resistant aluminium.
who plans to focus on training see whether they might be willing to
new drivers, appointing qualified take 40 percent of your problems off
executives (whatever that may your hands!
mean) and improving passenger My advice to the DA would be
safety on trains. She hopes that the – start working for your salaries.
new coaches (now being built) will Get your coalition councils to start
reduce overcrowding and thereby running bus services between
reduce crime. Johannesburg and Tshwane.
While I have some (temporary) Ask your sleepy members of the
sympathy for Kweyama, who is new provincial transport portfolio
to the job, the DA representatives committee to find out from the
on various councils, portfolio province what happened to the
committees and in parliament have 25-year integrated transport plan
sat in a collective coma for decades for Gauteng.
Aluminium is the metal of choice for the
transport market sector due to its light
weight, formability, corrosion resistance
and strength.
From heat shields and heat exchangers now, and it needs to take a lot of the Some short-term suggestions for
to running boards, roof racks, suspension blame for the current mess. If any the government – flood the stations
parts, fluid connectors and a myriad of political party wants to govern the with police and soldiers. Offer far
other components, aluminium works country one day, at least it should more substantial rewards for cable
best. have some ideas of its own. theft and arson convictions. Put
But wait, here comes the cavalry all the subsidised public-transport
For transportation chassis’, body
– in the form of the Gautrain, whose operators under one authority. Pay
panels and components – aluminium
promoters have made a science 50 percent of that board’s fees in
offers increased payloads, reduced
of reinforcing their bases in legal the form of transport vouchers. (Ms
fuel consumption and durability. Fully
recyclable, mill finished aluminium is concrete. The latest of the many Kweyama, that’s a quick way to sift
the environmentally friendly choice. Acts of Parliament giving legitimacy out “qualified” people.)
to this questionable scheme, is I’d like to hear from our dozy
For transport vehicles and components known as the Gautrain Management business schools and universities why
Agency (GMA) Amendment Act, no every loss-making public transport
- Think Hulamin 2 of 2017. company needs its own board of
Section 1(f) gives the GMA powers directors. Here’s a long-winded topic
to undertake any “project for the for a prospective doctoral thesis in
planning, design, construction, Business Administration:
financing, operation and How we managed to mix oil and
maintenance of any ... rail transit water – by allowing a company
system in the province”. (Gautrain) that loses R90 on each
Since Gauteng makes up about customer, to take over a business in
40 percent of Prasa’s national the same industry (Prasa) that loses
operations, my advice to Kweyama R13 on each customer.
would be to go over and have a chat Any offers from academics to
with the people at the Gautrain, and promote that thesis? F
12 FOCUS ON TRANSPORTEconomica lly m obile
@EconometrixZA
SAM Ro l l a n d is an automotive and transport economist at Econometrix. He is responsible for writing the Quarterly Automotive
Outlook at Econometrix, as well as commentary and analysis on vehicle sales and transport price drivers. Prior to joining Econometrix,
Rolland spent a number of years as an economist for the National Treasury of South Africa. He has also worked at Bloomberg New
Energy Finance as a research analyst in conventional power.
Of GDP and the stimulus
package. Oh, and the rand
The pi cture is look ing Gross domestic product (GDP) the wave of announcements in the
pretty blea k figures were released in September economy. The first was that of the
and came as a massive shock as record increase in the fuel price.
espite Christmas South Africa entered a technical While it was not unexpected, given
being around the recession with a second consecutive the performance of the rand and the
D corner, I am sure that
October crept up
quarter of contraction.
Markets were surprised by this,
climbing oil price, it could not have
come at a worse time as President
suddenly for many although it was always going to be Ramaphosa was gearing up for his
a consumer. Economists and other inevitable that agriculture would drag Jobs Summit.
industry analysts, or really anyone down the overall number – following A stimulus package had already
who owns a vehicle, would have the drought, the double-digit growth been announced by the president
noticed a hole burning through their seen throughout 2017 was never the previous month, so the fuel
wallets as October progressed. going to be sustained. price increase would have placed
With the tumult of everything Second, with Easter falling in April tremendous strain on the goals of
currently happening in the South once again this year, there is reason to both.
African economy, my thoughts were believe that the way statistics account Placing the events of October into
to break down the events of the last for holidays may have distorted the context for the transport industry, the
few weeks and months and draw out number. Ultimately, numbers aside, continued fall of the rand and rise of
the risks going into 2019. the picture remains the same. the fuel price landed a double blow.
Before looking at the events around Domestic output remains too weak to For one, the increase in running costs
October, it would be critical to first significantly lift growth. on both fuel and components was
look at the state of the economy... October, then, brought about exacerbated by the rise in the cost of
imported components. For vehicles
requiring more frequent maintenance,
the cost cycle suddenly increased
significantly.
There is also a dark cloud lurking
over the horizon... While the South
African Reserve Bank (SARB) refrained
from raising rates in September, the
direction of monetary policy of the
United States of America, and the
expected tightening of European
rates, will inevitably force the
SARB to hike rates, either sooner
than previously expected, or more
frequently.
The overall impact on the freight
For vehicles requiring more frequent industry is that profit margins will be
squeezed, and finance may become
maintenance, the cost cycle suddenly more difficult to come by in the next
increased significantly. three years. F
FOCUS ON TRANSPORT 13Fi rm a dv i c e
@NLawGlobal
A n dr ew R ob in s o n is a director at Norton Rose Fulbright and head of Transport for Africa and practice group leader for Disputes.
He is primarily a transport lawyer and specialises in both the commercial and litigation aspects of international trade, shipping, admiralty,
marine insurance, transport, logistics and marine environmental law, as well as maritime casualty response and subrogated recoveries.
Moving Freight from
Road to Rail continued
W e conti nue our
discussi on on c r eat ing
de di cated hubs for m oving
frei ght from roa d to r a il
nder the right
circumstances, rail
U transport has the
potential to be a
cost-effective freight
transport option. It
could assist in making the economy
more efficient, provide access for
freight and passenger movements,
and be an environmentally sustainable
transport solution.
However, as Transnet Freight Rail
has observed, rail transport has its operate the hub, or simply operate there may be options associated
limitations. The main disadvantage it? with services related to the
is its limited flexibility in terms of • There are a number of options movement, sorting, packaging or
destinations located off main freight requiring careful consideration given storage of those goods.
and passenger movement corridors the number of hubs required, and • When developing the R2R Hubs,
– especially non-corridor movements their ability to generate independent beneficiation ought to be considered
in rural and metropolitan areas. revenue so as not to increase the and provided for.
As discussed in the last issue, costs of moving goods from road
hubs dedicated to moving freight to rail. Wo r kfo rc e
from road to rail (R2R) are a possible • There may be advantages to •M ost studies of intermodal
solution. These hubs would serve as having a neutral body develop and connectivity point out the
collection points for bulk and break- operate the hubs, but we would importance of locating hubs in areas
bulk cargo, serving both import and caution against over complicating where there is a suitable, stable
export functions. Their focus should the model. workforce with the appropriate
be collection and distribution of • The operator would need to manage skills.
rail-friendly and competitive freight, not just the logistics relevant to the • While basic skills would no doubt be
including bulk and large break-bulk receipt, storage and despatch of the available locally, specialist skills may
commodity-based freight. goods, but also the shunting and initially need to be imported, and
In the last issue, we discussed the other operations relevant to rail. such a skilled workforce adequately
location and infrastructure as the first accommodated.
two factors that must be considered B e n e f ic iat io n • In creating this accommodation, we
to make the hubs effective. Here are • R2R Hubs have the potential to would recommend that an attractive
three further factors to consider: allow for product beneficiation satellite residential area be created
opportunities, which is an ongoing rather than the workforce being
Ope rator policy imperative in commodity-rich settled within the hub.
• Would the rail operator itself operate countries such as South Africa.
each R2R Hub or create a separate • T he opportunities for the Rail transport, properly implemented,
R2R Hub operator? beneficiation of the goods is not has many advantages. We need to
• Would this operator build and limited to the goods themselves – find creative ways to make it work. F
14 FOCUS ON TRANSPORTv ic ’s v ie w
VIC OLIVER is one of this country’s most respected commercial vehicle industry authorities, and has been in this industry for over 50
years. Before joining the FOCUS team, he spent 15 years with Nissan Diesel (now UD Trucks), 11 years with Busaf and seven years with
International. Do you have a comment or thought you would like to share based on this column? Visit www.focusontransport.co.za and
have your say!
Coupling old trailers
to new truck tractors
There are m a ny it em s to be carefully checked. will very quickly damage a new and
check on o l d er t r a il er s
• The slack adjustors on the trailer expensive fifth wheel, which will
to ensure t hat t hey a r e in
need to be the same as the slack have to be replaced.
a roadworthy cond it ion
and wi ll not da m age a new adjustors on the truck. (Don’t mix • Faulty trailer wheel alignment
truck or truc k t r ac tor automatic slack adjustors with affects the rolling resistance of the
manual ones.) rig, which, in turn, increases fuel
was prompted to • The trailer load-sensing valve needs consumption, and therefore the
write this article to be checked to ensure that it is operating costs of the unit.
I following a recent call
from an accredited
used-truck dealer,
in good working order and that
the connecting linkage is properly
secured.
• Poor electrical couplings, fittings and
wiring can lead to serious damage
on the truck tractor, especially on
who had sold a used • Brake boosters must be the same on the modern trucks that are fitted
6x4 truck tractor to a customer. Two all axles of the trailer and correctly with advanced electronics.
weeks after taking delivery of the fitted and adjusted. • Trailer landing gear must be checked
vehicle, the customer contacted the
dealer complaining that the truck that
he had bought – with a warranty –
had developed a brake shudder on
the front brakes. He demanded that
the vehicle be repaired by the selling
dealer.
The used-truck dealer immediately
dispatched one of his technicians to
go and investigate the problem and
found that the trailer brakes were
not working. The dealer called me,
wanting to know if this could be the
cause of the brake shudder on the
front brakes of the truck tractor.
In my opinion the trailer brakes not
working would have resulted in the
truck tractor doing all the braking –
and the cause of the problem. • All moving parts in the brake system to ensure that it is in proper working
It is important that an old trailer is need to be well lubricated and in order and that all the securing bolts
not coupled to a new or reconditioned good condition. are fitted and properly tightened.
truck tractor before checking that
the trailer, itself, is in a roadworthy Other components on the trailer In conclusion, always check that there
condition, and that all safety-critical that must be checked are the is sufficient swing clearance behind
items and components are thoroughly trailer kingpin, rubbing plate, wheel the cab to allow the trailer to swing
checked: alignment, electrics and landing without hitting the cab. Also check
• Brakes need to be checked to gear. that the fifth wheel is in the correct
ensure that they are working, in a • The trailer kingpin must be checked position to ensure that the mass
good condition and in harmony with for wear and replaced if worn. distribution of the rig is correct and
the truck’s braking system. • If the semi-trailer rubbing plate is that none of the axles on the rig are
• Brake linings and brake drums must scored, buckled or badly worn it overloaded or underloaded. F
FOCUS ON TRANSPORT 15face to fac e
Face to
face with
Raimo Lehtiö
Each m onth, w e chat to one of t he ca p ta i n s o f i n du st ry a bo u t p r e ssi n g i ssu e s. T h i s
month, CHARLEEN CLAR K E goes face to fac e w i t h R a i mo L e h t i ö , MD o f S ca n i a S o u t h A f r i ca
lease provide our readers with some responsible for a market bigger than South Africa. I was
P
background about your career – you travelling 170 days a year and I was also studying for my
have worked all over the world ... Finland, MBA!
Russia, the Far East, Estonia, Latvia During my time with ABB, I spent time in all the Nordic
and Lithuania to name but a few. What countries and also in Russia and Libya. The latter was
roles have you held and what were your especially interesting, because it was my first time in an
greatest achievements during these times? Arab country.
I started working in Norway, at the age of 19. I was Then, 17 years ago, I joined Scania, starting as the MD in
responsible for the plumbing team at a paper mill. Then Finland. I ran the Finnish company for three years and then
I joined ABB and spent 20 years with the company. I I took over the Russian company. I was there for four years.
went through some interesting times; at one stage I was So, in total (taking into account my five years with ABB in
16 FOCUS ON TRANSPORTfac e to fac e
Was that the most challenging time in your career?
It certainly was. It was incredibly challenging to be both MD
of Russia and regional director.
I did both jobs for one year and four months. I need to
say a big thanks to my wife. Incredibly, we are still married!
(Lots of laughter.)
When I moved to Russia I could not take my family with
me because my boys were going to university ... so I had
to make some big sacrifices. I also had to learn how to
prioritise. I could not have done this without the support of
my wife. When you have a job as demanding as mine, you
really rely on team playing within the family environment...
I have been extremely lucky to have a wife who supported
me while working on her own career at the same time. She
is a dentist and a very successful one at that; I am very
proud of her.
You experienced various different cultures during this
time. That must have been interesting?
It certainly was. I learnt about the Arab world in Libya.
While there I came to realise the importance of Arab
people leading companies. Even a foreign company
needs to be led by an Arab. That is very important in their
culture.
I also learnt about the Russian way of doing business
(luckily, I was moderately fluent in Russian at the time); they
are very direct. I also learnt about doing business in Asia,
where is it very important not to lose face.
Each country is unique. In South Africa, for instance, it is
quite informal. People are frank, informal and very nice.
When the opportunity arose for you to come to South
Africa, were you keen, and, if so, why?
South Africa was always a dream for me. I knew the South
African nature. I like the bush and I am a huge fan of
motorcycles (I have three BMW off-road bikes and one
Harley). I knew that I would be able to ride here!
In Russia, I did 30 000 km on my bikes and I have used
them a great deal in South Africa, too; I have been on two
long road trips, mainly off-road. I have also been to Lesotho
and visited the Golden Gate National Park.
The best thing, however, is that my wife has now retired,
and she is living in South Africa with me! I’m really happy
about that.
What were your main business goals/objectives for your
Russia), I spent nine years working in Russia. It was enough time as MD of Scania South Africa? Do you feel that you
hardship (lots of laughter). It was really tough when I arrived have achieved these thus far?
there the second time around – but we enjoyed massive I came to South Africa at a time when little growth was
growth. expected – so I came here to consolidate the business
When I joined Scania Russia, we sold 1 400 vehicles a (after some years of extremely fast growth). I turned my
year. By the time I left, we were selling 5 800 vehicles. Then attention to improving all aspects of the business.
I was appointed regional director for the Eastern Europe Just one was in the area of used trucks. We had more
and Northern Asian region. I was also sitting on the boards than 800 used vehicles in stock when I arrived; we now
of Scania China, Korea, Hong Kong, Taiwan, Russia, Ukraine have 250. I focused on growth within the services aspect of
and Kazakhstan. our business and I am delighted to report that this division
That was one of the most interesting times in my career, has grown by 15 to 20 percent each year during my time
because I was still MD in Russia. It was a really busy time; it here!
involved a lot of hours, a lot of travelling and a lot of positive Furthermore, we had too many demo trucks and there
stress. was insufficient control of these vehicles. I am pleased to >
FOCUS ON TRANSPORT 17face to fac e
report that our balance sheet is much cleaner now and we Well, I am responsible for seven countries: South Africa,
are more profitable. Namibia, Botswana, Mozambique, Zimbabwe, Zambia
and Malawi. We are the market leader in Namibia,
But you’re not only focusing on profitability, right? Botswana and Mozambique. Our success in Mozambique
Definitely not. My goal is also on higher customer is quite extraordinary because we only started the
satisfaction; this is far more important than market share. company there three years ago! Recently, we delivered
My focus has been on building the brand rather than 50 new vehicles to Grindrod in Mozambique, which was
getting rubber on the road. a real coup.
I focus on the market share of souls. We want to offer the
customer the right vehicle, with the best fuel consumption Based on your experience, how do South African transport
and the right carrying capacity. Some of our competitors sell operators compare to Scania customers elsewhere in the
the rubber that they have in the yard, without considering world?
exactly what the customer actually needs. That is not how There are many professional transport operators in South
we do business. Africa. Normally, outside of Europe, only about a quarter of
the transport operators are truly professional. This statistic
I believe that you have also concentrated on growing does not apply to South Africa. This is a mature market,
other parts of the business (as opposed to just focusing where at least 40 percent of the operators are really
on new-vehicle sales). Is this correct? professional.
Yes. We have been concentrating on used trucks and I can It’s very nice to work with them. South African customers
happily to report that we sold 1 700 used vehicles last year. are open and honest – much more so than in any other
We have been focusing on developing Scania Finance, and markets. Here, if you are open, we can work together as
we are now financing two thirds of new-vehicle sales and partners quite fast. This takes far longer in other markets.
40 percent of used sales (versus 20 percent in the past).
Growing the market share in services is very important. Connectivity is a big thing in the Scania world. Is it a big
This business is not just about new vehicle sales. It is about deal here in South Africa too?
offering a total package and making our customers more Absolutely. We have thousands of connected vehicles.
profitable. This has allowed us to offer flexible maintenance plans.
If an operator has good drivers, service intervals can be
Harking back to your days in Siberia, I have noticed that extended as a result.
you are also growing your dealer network here in South
Africa. Please tell us more. You have previously spoken about sustainability, which
We have opened a dealership (that we own) in Port is one of Scania’s main global focus areas. What does
Elizabeth. There was a private dealer in Port Elizabeth sustainability mean for Scania South Africa and for local
previously, which was not professional enough. operators?
We have also opened a new dealership (which we also I believe that there is potential for us to sell gas- and
own) in Walvis Bay. In Windhoek, we have
invested in a panel, paint and accident-repair
facility, which is unique within our industry.
Previously the vehicles were actually towed
to South Africa for repairs.
We are now opening a dealership in
Musina (we have a strong BEE partner there).
We have also opened a new dealership in
Nelspruit and one in Maputo.
We are not only growing our network,
however; we are making better use of
current facilities. For instance, since the
beginning of this year, we have offered
extended servicing hours at our biggest
dealerships (from 07:30 to 22:00).
At our Harrismith dealership, servicing
is offered until 23:00. It is also possible to
pre-schedule a service later than that (even
02:00 is no problem). I am confident that our
service network is ready for the growth that
will come.
You mention Maputo. How are you
performing in Mozambique and other
export markets?
18 FOCUS ON TRANSPORTfac e to fac e
biodiesel-powered vehicles. Ethanol is not really of interest front-engine sales to rural areas, but our Touring is also
in this market. In the short term, electric vehicles are not taking off (we will sell 30-percent more than last year and
of interest although hybrids may work. Long term, electric we are expecting further growth of another 30 percent next
vehicles will be a must. year).
We will end up with around the same share of the bus
I am glad to hear this, because I have been writing a lot market – about 22,5 percent. Importantly, there will be a
about electric trucks lately. When do you think South sustainable balance between volume and market share.
African operators will be ready for electric trucks?
That depends on costs. According to a Scania study, biofuels Studying the Naamsa statistics, at face value it may seem
are an appropriate bridge technology in the transition to a as though Scania South Africa is losing market share to
fossil-free commercial-transport system. We believe that Volvo. Is this a fact? If so, is there a particular reason for
electric vehicles should become popular by 2031, when the this that the market may not be aware of?
average total cost of ownership for electric vehicles in all Definitely not. Other manufacturers may be losing market
segments should be level with diesel. share to Volvo, but we are not.
Your company has a strong record of success. Six years South Africa is officially in a recession. How are you
ago, you had a seven- or eight-percent share of the reacting to this?
extra-heavy market. By 2017, you had a 16-percent share We are cementing our relationships with existing customers
– and a 22,5-percent share of the bus market. What is and developing new relationships with others. We are
the current market situation? What were your market- especially excited about the relationships we have formed
share aspirations for 2018? Are you on track to achieving with smaller black-owned companies with whom we are
them? working.
The first thing that I must stress is that we look at market We are focusing on the positive aspects of the business
share differently. We also take into account the market – driver training, for instance, which benefits our customers.
share of services. That’s more important than market share We are also doing more training internally, so that we can
of units, but we will take more market share at the end of deliver even better service.
this year.
We had a tough start to the year. We had volume Some of the European truck manufacturers are battling
restrictions due to a lack of stock. We could easily to meet demand. Is this the case with Scania?
have sold hundreds more vehicles. Despite this, we will Yes, we battled with stock in quarter four last year and
maintain our 16-percent share of the extra-heavy truck quarter one this year. Hopefully this is now a thing of the
market. past.
When it comes to buses, we are keeping our share.
We are number two in this segment, and in many export Has Scania South Africa been affected by the strike at
markets we are number one. We are doing very well in one of its main casting suppliers, which caused massive
delays in V8 production?
No, fortunately not. That only affected Europe. The shortage
only pertained to Euro-6 engines, which is why we were not
impacted. We could source as many Euro-3 V8s as we
needed.
There is talk of a new Scania truck range to be launched
in South Africa very soon. Is this the case? If so, do you
have further details that you can share around the
expected date of arrival?
I can only mention that Latin America (from where we get
our kits) is moving its production to the new range. We will
get the new truck in 2019 or 2020; we don’t know yet. We
are not in a hurry – because we have a really good vehicle
presently.
Finally, you’ve been here since mid-2016. How much
longer will you stay in South Africa?
Well that is hard to say. According to my contract I should
retire next year, but you never know! I have had a busy and
enjoyable two years. I hope that I can stay here for a couple
more years.
Of course, the economy is not good, but we are doing
well, and we have great people in the company, and so I
am very pleased with the current situation. F
FOCUS ON TRANSPORT 19FOCUS o n EHCVs
When
bigger
really
is better
The extra-heavy com m erc ia l vehic l e (EHCV ) seg me n t i s t h e bac k bo n e o f t h e S o u t h
Afri can truc k ing ind us t ry. G a r et h G r e at h e a d e x p lo r e s t h e dy n a mi c s o f t h e seg me n t
ccording to the latest results released by Dave van Graan, head of special projects at MAN
A
the National Association of Automobile Automotive, says: “The EHCV sector is what the industry
Manufacturers of South Africa (Naamsa), refers to as the ‘premier league’ of commercial vehicles.
Associated Motor Holdings (AMH) and It is also an extremely demanding sector to satisfy,
Amalgamated Automobile Distributors as operators continuously seek to improve and
(AAD), by the end of September this year a total of 19 939 professionalise themselves to offer a better and more
new trucks and buses had been retailed. efficient solution.
Despite tough economic conditions, the overall sales in “To stay on top of the megatrends of future transport
the South African commercial vehicle market increased by solutions requires massive investment by the original
2,3 percent year-on-year at the end of the third quarter in equipment manufacturer (OEM) in product development.
September. Unfortunately, not all sectors have experienced “Two thirds of the EHCV segment is made up of long-
equal growth with some doing better than others. haul truck tractors – mainly 6x4 prime movers. As the
Sales in the medium commercial vehicle segment were saying goes – without (long-haul) trucks, South Africa
down by 2,3 percent by the end of the third quarter with a stops.”
year-to-date total of 5 730 units.
Heavy commercial vehicle sales were up 1,7 percent Lo ca l asse m b ly a nd e xp o rt
year-on-year to 4 039 units, while the EHCV segment Through its Automotive Investment Scheme (AIS),
increased by 5,9 percent to 9 391 new vehicles sold. Bus the government aims to promote investment, boost
sales declined to 779 units, a 1,9-percent decline. production and stimulate economic development. Part
As such, the positive results can be attributed, at least of this initiative included establishing favourable trade
partially, to strong sales of EHCVs, which continue to defy agreements with neighbouring countries in an effort to
market trends and a sluggish economy. provide a larger market for manufacturers.
In September, South Africa exported a record number of
W h y ex t ra h eav i e s ? vehicles into sub-Saharan Africa. At the same time, year-
Whether it’s the transport of mining commodities from on-year exports of commercial vehicles went up by one
the mines to export harbours, fast-moving consumer percent, or 565 units. Surprisingly, cross-border sales of
goods from harbours to re-distribution hubs, or passenger EHCVs decreased by 23 percent (321 units).
cars from assembly plants to retail dealerships – the Anders Friberg, general manager of truck sales and
vast distances between South Africa’s collection and exports at Scania South Africa, says: “It has been a
distribution points creates a demand for long-haul rather challenging year when it comes to the export of
transport solutions. ECHVs. There are many different reasons contributing to >
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FOCUS ON TRANSPORT 21FOCUS o n EHCVs
these challenges; one would be based around politics and
the lack of hard currencies. However, Scania South Africa
does see potential for resolution and subsequent growth
in our export markets. Today, approximately 20 percent of
our total sales go to export.”
In July 2014, FAW provided the first large-scale
investment by a Chinese company in the Coega Industrial
Development Zone, in the Eastern Cape. Total FAW
exports reached 159 units in 2016, which rose to 212 units
in 2017, establishing FAW as the second-largest exporter
of commercial vehicles in South Africa.
“This is further testament to the brand’s promise to
build quality vehicles in South Africa for Africa. Customer
demand for locally built FAW trucks has increased
exponentially in the last three years, primarily due to their
quality and speed to market. As such, the brand set a new
total sales record in 2017, despite the tough economic
environment,” says FAW South Africa.
Unfortunately, the
market is too small
to justify the existence
of almost 20 OEMs.
Some players will
probably be forced
to seek other
greener pastures.
“Friberg says: To date the construction
segment has dropped by as much as
30 percent in comparison with last year.
We can also see that other lower-price
OEMs have entered this segment that
has previously been dominated by one
brand for a long time.”
Looking at the broader market, Ernie
Mar k et t ren ds Trautmann, vice president of Hino South Africa, says:
Gert Swanepoel, MD of UD Trucks Southern Africa, says: “Although there was a lot of positive sentiment at the
“The long-haul segment remains stable, supported by beginning of 2018, specifically owing to the election of
the slight growth in demand for transport on the back of President Cyril Ramaphosa, the new-truck market had a
increased trade figures. However, a decline in the mining, disappointing performance in the first six months of the
agricultural and manufacturing industries are still stifling year.
sales in this segment. “In the normal cycle, the second half of the year is
“More specifically, sales to operators in the distribution usually better than the first, and if this happens we’ll see a
industry, including long-haul, are driving growth. The market result similar to last year.”
distribution segment, which includes waste, remained Friberg also makes mention of the economic optimism
strong as new vehicles were acquired to satisfy tenders, that prevailed at the start of the year. “In addition, a
while the demand for construction vehicles has declined large number of customers were in a replacement cycle
that helped the EHCV sector to steadily grow. I do think >
slightly.”
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